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The capitalization of area payments into land rental prices: a panel sample selection approach

Gianni Guastella (), Daniele Moro, Paolo Sckokai () and Mario Veneziani ()

No 186375, 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia from European Association of Agricultural Economists

Abstract: Previous empirical literature suggests that agricultural subsidies are capitalized into farmland rents and that the introduction of the 2003 decoupling reform of the EU Common Agricultural Policy, attaching the subsidy to land only, might have even extended the phenomenon of capitalization. Employing the FADN dataset for Italy we investigate this issue using methodologies accounting for selectivity, endogeneity and individual heterogeneity simultaneously. The evidence suggests that selectivity bias causes inconsistent estimation of parameters and wrong inference. Results reveal instead that, in Italy, there is no incidence of both coupled and decoupled payments.

Keywords: Agricultural and Food Policy; Land Economics/Use; Resource /Energy Economics and Policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-eur
Date: 2014-09
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